There has been a serious crisis for craft beer breweries over the last five years as Gen Z prefers mocktails and cocktails, resulting in huge financial losses for companies, including Guanella Pass.
Brewing Industry Shock
Guanella Pass Brewing has joined a long list of craft beer companies by filing for Chapter 11 bankruptcy.
Financial Struggles Unveiled
The 7-year-old brewery revealed financial struggles with a staggering $2.3 million debt, overshadowing its $860,000 gross revenue for the year 2023.
Pandemic Impact on Craft Brewers
COVID-19 disrupted the craft beer industry as breweries heavily reliant on in-person visits suffered financial strains due to lockdowns, pushing some to the brink of closure.
Moving Away From Beer
During the pandemic, many went teetotal, and younger consumers shifted away from beer and alcoholic drinks.
Gen Z Drinking Less
Research from Gallup showed that 60% of Gen Z (18-24 year-olds) consume alcohol, compared to 70% of the generation above that do.
Mocktails and Cocktails
If they were going to drink on a night out, research shows that many Gen Zers would prefer a mocktail, cocktail or hard seltzer as opposed to a beer.
A Common Phenomenon
Anchor Brewing, an iconic San Francisco brewery that was enjoyed across the country, shut down last summer, signaling the beginning of a crisis for craft beer.
Georgetown’s Craft Beer Pioneer
Established in May 2017, Guanella Pass became Georgetown’s first brewery since Prohibition, marking a significant milestone for the tiny Clear Creek County town.
Strategic Brewery Locations
With locations in Georgetown and Empire, Guanella Pass strategically positioned itself, adding a brewpub at the foot of Berthoud Pass in Empire in 2020.
Building Renovation Journey
Steven Skalski’s 2016 purchase of 501 Rose St. cost $180,000 and transformed an antique shop into a modern brewery.
A Mountain Brewery
Guanella Pass is a brewery that sits 8,530 feet above sea level, facing financial challenges, but continued to operate after filing for Chapter 11 bankruptcy.
Brewing Site Overhaul
Skalski went through enormous challenges when building the site, “We’ve got this building, we had to build it all out. It was an old antique shop,” he said.
Community Impact
Operating the SilverBrick Saloon, a restaurant in Georgetown, the brewery had an impact on the local community, making the closure even more upsetting.
Legal Battle and Debt
On Dec. 7, the brewery faced a legal challenge from On Tap Credit Union, citing a $36,000 credit card debt further complicating its financial troubles.
Skalskis Facing Lawsuit
The brewery and Skalski faced a lawsuit in Jefferson County, with On Tap Credit Union asserting an outstanding debt that remains unanswered in court.
Assets and Liabilities
Guanella Pass disclosed $72,340 in assets, primarily consisting of brewing and restaurant equipment, while grappling with various debts.
Revenue History
Reviewing its financial history, the brewery reported $792,000 in gross revenue in 2021, $1.1 million in 2022, and a decline to $860,000 in the challenging year of 2023.
Bankruptcy Filing Details
The bankruptcy paperwork revealed $573,000 owed to First Savings Bank and $256,000 to the Clear Creek Economic Development Corp.
Other Breweries Faced the Same Fate
Other breweries that faced a similar fate were Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing.
The Future of Craft Beer
Adding Guanella Pass, a very popular craft beer, to this long list shows that the future looks very bleak for the industry.
The post Craft Beer Industry Faces Turmoil as Gen Z Prefers Cocktails, Files for Bankruptcy first appeared on Swift Feed.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.